Despite geopolitical uncertainty and economic challenges, North American businesses are thriving, according to compelling new research from Economist Impact and DP World. Their secret? A bold embrace of technology, including Artificial Intelligence (AI), to reconfigure their supply chains.
According to the 2024 Trade in Transition study, a growing belief that technology will transform the efficiency and resilience of supply chains in tandem with agile trade strategies is the primary driver of optimism for 2024. With rising concerns of political instability, inflation, and a downturn in key markets, businesses in North America are actively reconsidering risks by deploying AI-based tech and dual logistic strategies.
"Businesses are inherently cautious amidst ongoing economic pressures, especially given heightened geopolitical tensions. The intricate dynamics of globalization and the broader landscape are reshaping global trade," says Brian Enright, CEO & managing director, DP World Americas. "There is a growing conviction that technology integration, coupled with agile supply chain strategies, has the potential to revolutionize the efficiency and resilience of supply chains, enabling businesses to adapt more quickly and seamlessly. Our commitment to innovation will enhance the vital connectivity, efficiency, and adaptability needed by businesses."
Key Takeaways:
- The annual Trade in Transition study, commissioned by DP World and led by Economist Impact, captures the perspectives of trade experts and senior executives globally. This year’s report is the fourth edition.
- The global survey found that when asked to assess the future of global trade, one-third of North American business leaders pointed to technologies that improve supply chain efficacy and resilience as their main source of optimism. Other key highlights of the Trade in Transition study include:
- 97% of executives are using AI to revolutionize at least one aspect of their supply chain operations, from solving inventory management issues to reducing trade expenses.
- In the coming year, businesses plan to incorporate advanced automation (28%), augmented or virtual reality (27%), 3D printing and blockchain technology (26% and 25% respectively) to enhance efficiency, traceability, security and data protection.
- North American businesses are strategically navigating heightened risks by nearshoring, establishing parallel supply chains and expanding into neutral markets. Increasingly, companies are reconfiguring their supply chain by working with fewer suppliers – a strategy up by 160% over last year’s report.
- Over a quarter of businesses are opting for fewer suppliers, marking a 160% increase from the previous year. This trend towards consolidation is driven by a desire to reduce supply disruptions, even as businesses grapple with the trade-offs between diversification and control, and risk management.
- Businesses face significant challenges in exporting and importing due to transport expenses (26%), shortages of vital production inputs (22%), and concerns about rising inflation and economic unpredictability (27%). Uncertainties surrounding tariffs also remain a substantial concern, with 20% expressing apprehension regarding exports and 21% concerning imports.
